Do I need to say more than the headline? Filed under: Groundhog Day.
Abenomics is yet another failure for Japan. It’s sad to see Japan’s continued struggle to regain economic dynamism after 20 years of waiting for it to clean up its act. I was very optimistic when Hashimoto implemented his “big bang” financial liberalization program, and then when Koizumi followed up with his privatization plan. However, much remains to be done in the realm of structural reform. PM Abe’s “three arrows” rhetoric has failed to produce results in the third arrow, structural reform.
Both the FT and the WSJ have been pursuing this theme recently (the FT’s series is titled, appropriately, “This is nuts, when’s the crash?“). We experience a downturn, the government and central bank acts to inflate an asset bubble in order to ameliorate the effects of the downturn, and this bubble sets the stage for the next downturn.
Here are some of the key points of the WSJ piece:
Financial market risk-taking is reaching excesses comparable to those that precipitated the global financial meltdown, Jose Vinals said at a Peterson Institute for International Economics event.